BAE Systems wins contract to provide more than 130 F-16 warplanes to South Korea

Defence giant BAE Systems has landed a deal to upgrade South Korea’s fleet of more than 130 F-16 warplanes.

The contract, thought to be worth $1.1billion (£672illion), is a boost to BAE coming just days after the company revealed that talks with the United Arab Emirates over the potential £6billion sale of 60 Eurofighter Typhoon jets had collapsed, sparking a fall in its share price.

BAE (up 8.5p at 430.60p) already upgrades F-16 jets, the prototype of which first flew 40 years ago, for the US Air National Guard and the Turkish Air Force. This year it won a smaller contract to support and provide spares for F-16s used by Oman.

Warplanes: BAE Systems has landed a deal to upgrade South Korea's fleet of more than 130 F-16

As military spending becomes squeezed on both sides of the Atlantic, BAE is eyeing more maintenance and servicing contracts and also wants to boost overseas exports.

The company said services now account for half of group revenue and that it continues to win new business despite a challenging operating environment.